An investment advisor has been sentenced in federal court to 100 months in prison for his role in a $7 million fraud scheme that centered on steering clients into investments in "life settlements."
U.S. District Court Judge Nathaniel M. Gorton sentenced Joseph Gennaco to the prison term, to be followed by three years of supervised release, for 27 counts of mail and wire fraud. He was ordered to pay $7 million in restitution to 40 victims.
In February 2013, Gennaco pleaded guilty to all counts in the indictment. Prosecutors said that he has been held in custody since November 2011, when his bail was revoked because, among other things, he continued to defraud people even after he had been charged.
Prosecutors asserted that from 2001 through 2011, Gennaco defrauded customers of his insurance business by claiming that their money would be invested in various insurance-based instruments. Instead, the government contended, Gennaco diverted the customers' funds for his own personal and business purposes.
Gennaco operated in the name of several entities, including Gennaco & Associates, Oceanview Financial Services, GCT Trust and Crescent Management Group. The government said Gennaco told investors their funds would be invested in one or more life insurance policies — or "life settlements" — and that the investments would be repaid with a "guaranteed" profit from the sale of those policies.
In reality, according to the government, Gennaco took investors' funds for his own uses, allowed insurance policies to lapse by failing to pay the premiums, and failed to repay investors when he sold policies that had been purchased as investments. By continually reassuring investors their money was safe and by offering a variety of phony excuses for the delay in repaying investors, Gennaco strung along many of his victims for years, the government contended.
Originally published on FC&S Legal: The Insurance Coverage Law Information Center. FC&S Legal is theindustry's ONLY single-source, comprehensive portal developed specifically for insurance coverage law professionals.To find out more, visit www.fcandslegal.com. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
